Market Mad House

In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. Friedrich Nietzsche

Long Ideas

Retailers Still Not Accepting Apple Pay

Apple Pay’s acceptance by retailers is a slower and more painful process than Apple Inc. (AAPL) would like us to believe. Only a handful of major retailers have accepted the product, and the rate at which retailers are adopting it is at a trickle.

A look at Apple Pay’s website indicates that most of the retail outlets taking the payment app are specialty stores and smaller regional chains. From the looks of it, Apple is still having a very hard time getting retailers to adopt its payment solution. Currently, the only major national retailers taking Apple Pay are:


  • Whole Foods Market
  • Sports Authority
  • Toys R Us and its Babies R Us subsidiary
  • Aeropostale
  • Office Max/Office Depot
  • Staples
  • Macy’s
  • Footlocker and its various subsidiaries
  • Sprouts Farmers Market
  • Walgreens
  • Bloomingdales
  • Petco

Interestingly enough, one dying retailer, Radio Shack, also appears on the list of stores that take Apple Pay. It looks as if Apple is so desperate to demonstrate its product’s popularity that it will take any retailer it can get.

Nor is it just retail that Apple is having a hard time selling Pay to. Currently, only two major fast food chains, McDonald’s and Subway, take Apple Pay, so retailers are not the only businesses skeptical of Apple Pay.

Big Retail Still Says No to Apple Pay

The nation’s four largest retailers—Walmart Stores Inc., Costco Wholesale, Kroger and Target—are conspicuously absent from the list. Also missing is the nation’s second largest drugstore operator, CVS Health, the major home improvement stores Lowe’s and Home Depot and most the nation’s second largest grocer, Albertsons/Safeway. Albertsons appears in the coming soon category, but it has been listed there for a very long time.

The largest addition to the list is Winn Dixie, which operates 485 supermarkets, but it only operates in five states: Florida, Alabama, Louisiana, Georgia and Mississippi. Most of the grocers on the list are smaller regional chains, although some of them, such as the privately held Meijer, have a large presence in some regions of the country. Meijer’s supercenters are a fixture in Midwestern states like Michigan and Indiana.


The most intriguing addition to the list is Coca Cola Vending, which could drive widespread adoption of Apple Pay. People might be more likely to use Apple Pay if they could use it at vending machines. The problem with that theory is that most vending machines are owned by private contractors and entities other than Coca Cola itself. Another problem is that vending machines would have to be retrofitted to take Apple Pay, an expensive process that operators might balk at.

There are also lots of rumors about what’s coming next, including some about Trader Joe’s. The speculation about Trader Joe’s is apparently being fueled by the fact that some of the popular discount grocer’s stores are upgrading their payment terminals. Note the name Trader Joe’s does not appear at the Apple Pay site or on its coming soon list, so these rumors could just be speculation.

Similar rumors are swirling around Target, where CEO Brian Cornell has told reporters that he would love to have Apple Pay. Some news reports indicate that Target has been testing Current C, big retail’s alternative to Apple Pay. One reason why the major retailers like Walmart and Kroger have refused to jump onboard the Apple Pay bandwagon is that they want to use Current C instead. Unfortunately, there is no word on when Current C will actually be rolled out.

Apple Wants to Pay You to Use Apple Pay

Apple seems to be getting a little desperate in its efforts to get people to use Apple Pay. The New York Times reported that Apple could be turning to one of the credit card industry’s standard strategies to get people to use Apple Pay: a rewards program.

Details of the program are not available, but I imagine that it will work a lot like credit cards rewards programs. People will earn cash or points that give them a discount on a product each time they make a purchase with Apple Pay.

Such rewards programs have historically been very successful for big grocers like Kroger and for credit cards. Yet it remains to be seen whether they will appeal to Apple Pay users. The rewards program could also be designed to head off Current C, which is supposed to be compatible with existing rewards programs such as Kroger’s popular gas points.

Apple seems a little desperate because Google Inc. (NASDAQ: GOOG) is planning to introduce its answer to Apple Pay in the form of Android Pay. Few details about this digital wallet are available, but Google is supposed to make it available soon. Android Pay, which will probably be linked to Google Wallet, could be a major competitor to Apple Pay because it will be available on a wide range of mobile devices.

On the horizon are Samsung, which has purchased a service called Loop Pay that could be used to create a payment app, and PayPal. PayPal, which is soon to be spun off from eBay (NASDAQ: EBAY), owns one of the most promising payment solutions, Venmo.

It looks as if Apple is facing an uphill battle in its efforts to get retailers to use Apple Pay. One has to wonder if the advent of Android Pay will make that battle easier or harder. A potential nightmare for Apple would be that when Android Pay appears, it will be compatible with Current C. Part of the reason why the Current C roll out might have been delayed is that the big retailers are working with Google in an effort to get their solution into Google Play.

The news stories indicate that despite its popularity with journalists, Apple Pay is not a big success yet. Instead, it is looking more and more like a niche player that could end up playing second fiddle to Android Pay.

Disclosure: Your blogger owns shares of Kroger and eBay Inc.